Indian telecom operator BSNL has lost an annual maintenance contract worth Rs 400 crore or $57 million due to poor performance, Financial Express reported.
The development assumes significance because the loss making telecom operator is seeking a Rs 74,000 crore government bailout to revive the business.
BSNL has posted a net loss of Rs 13,804 crore on a revenue of Rs 18,865 crore during the fiscal 2018-19.
BSNL has around 1.65 lakh employees and its wage bill accounts for 77 percent of the total revenue.
BSNL has lost an annual contract worth around Rs 400 crore for maintaining the fibre laid under the government’s BharatNet project to provide broadband connectivity to over 2.5 lakh gram panchayats.
Bharat Broadband Network (BBNL), a government PSU that lays the fibre, has now awarded the contract to CSC e-governance Services, a special purpose vehicle set up by the ministry of electronics and IT (MeitY), at a lower annual charge.
BSNL was maintaining the fibre from October 2017 to June 2019. BBNL gave the one-year to CSC SPV. BBNL paid over Rs 800 crore to BSNL for the purpose but the company failed to provide quality services.
BSNL received Rs 15,000 per year, per kilometer for fibre maintenance from BBNL. CSCs will charge Rs 9,600 per year, per kilometre, under the new contract.
Dinesh Kumar Tyagi, CEO, CSC SPV, confirmed that a contract for one year for maintaining BBNL fibre has been signed in July 2019. Village level entrepreneurs (VLEs) who run CSCs will be doing the job, he said.
BSNL’s participation in the phase II of BharatNet project has also been curtailed by over 50 percent, the report said.
The phase-I of the broadband project connecting 1 lakh gram panchayats was implemented by three central public sector units – BSNL, RailTel and PGCIL, of which majority of work was done by BSNL.
The India government is also exploring the option of public private partnership (PPP) in phase-II of the broadband connectivity project, apart from the participation of states and their agencies.
BBNL has cancelled or put on hold many of the detailed project reports (DPRs) submitted by BSNL in the wake of new strategies.